Mak­ing Amer­ica en­ergy dom­i­nant

The Washington Times Weekly - - Commentary - By Stephen Moore

In his lat­est pol­icy speech, Pres­i­dent Don­ald Trump re­newed his prom­ise of an era of Amer­i­can global en­ergy dom­i­nance. He said that this en­ergy su­per­power sta­tus would be gained by us­ing “all of our en­ergy re­sources.” He also noted that in just six months, “we re­duced the petroleum share of the trade deficit by 5 per­cent.” Not bad. And what a wel­come change from Pres­i­dent Obama whose ad­min­is­tra­tion took ev­ery pos­si­ble step to stop Amer­i­can fos­sil fuel de­vel­op­ment.

Mr. Trump rec­og­nizes what al­most all his crit­ics choose to ig­nore: we are en­ter­ing an age of Amer­i­can en­ergy re­nais­sance that will last not just years but many decades. While the left keeps plac­ing bad bets on ex­pen­sive and un­re­li­able green en­ergy, Mr. Trump has a more ro­bust and re­al­is­tic strat­egy: make the United States the 21st cen­tury Saudi Ara­bia. We are well on our way get­ting to that goal given the con­tin­u­ing story of the shale oil and gas ex­plo­sion. Here are some facts to think about:

Since 2007 Amer­ica has in­creased its oil and gas out­put by 75 per­cent with most of it com­ing from North Dakota, Texas, Ok­la­homa, West Vir­ginia and Penn­syl­va­nia.

Since 2015 when Repub­li­cans and Congress passed a law ending the oil and gas ex­port ban, the U.S. has ex­ported more than 150 mil­lion bar­rels of crude.

At the mo­ment, nat­u­ral gas is the dis­rup­tive en­ergy source that is blow­ing away the com­pe­ti­tion. This is good news for Amer­ica be­cause we have far more nat­u­ral gas than any­one, with per­haps the ex­cep­tion of Saudi Ara­bia. This has the looks of some­thing big. The U.S. has by far the cheap­est nat­u­ral gas and are very ca­pa­ble of re­plac­ing the Mid­dle East and Rus­sia as pri­mary sup­pli­ers to Europe and Asia.

Thanks in part to Mr. Trump’s en­ergy vi­sion, we are now build­ing liq­ue­fied gas ter­mi­nals that will lead to sharp in­creases in exports of our abun­dant nat­u­ral gas. Bloomberg re­ports that “since start­ing up last year, Che­niere En­ergy Inc.’s Sabine Pass ter­mi­nal in Louisiana — the first ma­jor fa­cil­ity send­ing shale gas over­seas — has shipped more than 100 car­goes of LNG over­seas.”

Pipe­lines are nec­es­sary to make this en­ergy fu­ture pos­si­ble and Mr. Trump is al­ready green­light­ing these projects that were de­layed or killed by Barack Obama — who hated fos­sil fu­els.

If we are to sprint ahead of the rest of the world when it comes to en­ergy pro­duc­tion, we will need to al­low drilling on fed­eral lands. We are talk­ing about un­lock­ing some $50 tril­lion of en­ergy as­sets ly­ing un­der­neath us. Just the roy­al­ties, leases and in­come taxes gen­er­ated from all of this en­ergy trea­sure would raise about $2 tril­lion for the fed­eral fisc.

Coal pro­duc­tion this year is up about 15 per­cent, ac­cord­ing to The Wall Street Jour­nal and min­ing jobs are back as well. That’s a tes­ta­ment to Mr. Trump’s re­ver­sal of Obama-era reg­u­la­tions meant to bank­rupt coal. We need cheap coal to pro­duce steel and other man­u­fac­tured goods in Amer­ica, so coal pro­duc­tion is ba­sic to keep­ing blue col­lar and hard hat jobs here at home in Penn­syl­va­nia, Michi­gan, Ohio, In­di­ana and West Vir­ginia. Out of ne­ces­sity, Big Coal is learn­ing how to pro­duce cleaner and cheaper coal ev­ery day — as the in­dus­try that still sup­plies nearly one-third of our elec­tric­ity com­petes with nat­u­ral gas.

In­stead of im­port­ing $200 bil­lion of en­ergy ev­ery year, the U.S. and Canada could soon eas­ily be ex­port­ing that amount. Of course, the cur­rent low global price of oil — be­low $50 a bar­rel — has all pro­duc­ers strug­gling might­ily as the world ab­sorbs a won­der­ful glut of cheap en­ergy. But the amaz­ing Amer­i­can frack­ers are dis­cov­er­ing new ways of pro­duc­ing more and more en­ergy at lower and lower costs.

The in­dus­try that has got­ten most fi­nan­cially flat­tened by low nat­u­ral gas prices is green en­ergy. As long as nat­u­ral gas prices stay be­low $3 per mil­lion cu­bic feet, wind and so­lar are as vi­able as cold fu­sion for years to come.

It is very sim­ple: with­out bil­lions upon bil­lions of gov­ern­ment man­dates, tax cred­its, pro­duc­tion sub­si­dies, and other tax give­aways, there would be vir­tu­ally no wind and so­lar in­dus­try to­day in the U.S.

As my Her­itage col­league Jack Spencer, an ex­pert on en­ergy pol­icy, puts it, “the only was so­lar and wind cre­ate jobs is by spend­ing tax­payer dol­lars. Those aren’t real net new jobs be­cause the gov­ern­ment has to take a dol­lar from some­one else to hand­out a dol­lar.” What in­dus­try couldn’t cre­ate jobs if the gov­ern­ment kept show­er­ing it with bil­lions of dol­lars of free money? We’ve been stupidly do­ing this since the 1970s. Per­haps there will be break­throughs that make green en­ergy vi­able, but we’ve heard those un­ful­filled prom­ises now for 40 years.

No one knows where the fu­ture will take us with en­ergy tech­nol­ogy — can nu­clear power make a come­back? — but for now at least, no nation is bet­ter poised to ex­ploit the new global age of shale en­ergy. Bet­ter still, this is a for­tu­itous out­come that won’t cost the gov­ern­ment money (as op­posed to the green en­ergy racket), but will raise tril­lions of new tax dol­lars to fund pub­lic pro­grams.

It’s a tribute to Mr. Trump’s vi­sion and gut in­stincts that a real es­tate de­vel­oper from the North­east gets that when so many so-called en­ergy ex­perts, in­clud­ing Mr. Obama, don’t.

If we are to sprint ahead of the rest of the world when it comes to en­ergy pro­duc­tion, we will need to al­low drilling on fed­eral lands. We are talk­ing about un­lock­ing some $50 tril­lion of en­ergy as­sets ly­ing un­der­neath us.

Stephen Moore is an economic con­sul­tant with Free­dom Works and a se­nior fel­low at the Her­itage Foun­da­tion. His lat­est book is “Fu­el­ing Free­dom: Ex­pos­ing the Mad War on En­ergy” (Reg­n­ery, 2016).

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